Bro Sky,

Not Sifu here lar, more like Groo - the Wanderer (heheh - always searching and sometimes, by chance stumble onto something good ).

True true - BMW vs CanChill hehe.
Hmm - yeah, i think i've been barking up the wrong tree when U pointed out Whole Life Non Participating (yet not term), and not Whole Life Participating. Something for me to kacau my insurance agents now - kamsiah

1) "very shallow thinker" - I do not know Mr Tan personally but I only know him from the Internet: http://en.wikipedia.org/wiki/Tan_Kin_Lian Yes, he was a Loser in the recent S'pore presidential election. He was CEO of NTUC Income (1977-2007, a whopping 30 years), growing the assets from SGD28 mln to SGD17 bln (at 2.4 exchange rate: MYR40.8 bln). What impresses me is that: he dropped out school (due to poverty) and yet can become a FULLY-qualified actuary in 10 years (I certainly cannot do that (you call me DUMB-dumb but I am "swallower" than him)- if you know how difficult it is to become a full credentialed ACTUARY, let alone on a self-study basis after 'O'-level (SPM)). To call a such person "very swallow thinker" - I really do not know how to what to say to you. Yes, he is trying to sell his books. To me, he is not doing it for $$$ (yes, he lost his election deposit) but I am certain he still have millions. He may be doing it for PUBLICITY but I do not think he has ILL intentions.

2) For your "googled" article/information on Nikko Securities, it is just a small part of the BIGGER picture (I have friends who had worked in Nikko and I know the fiascos). Anyway, your information provided is IRRELEVANT for what Mr Tan has recommended as a potential form of investment: STI-ETF index/tracker funds. Do you know what is STI-ETF and its history? ETF are exchange-trade funds ( http://www.sgx.com/wps/portal/sgxweb/home/...securities/etfs ). STI-ETF tracks/mimics the STI index. In S'pore, there are two of them: one by State Street (they are "BIG") and the other by Nikko Asset Management - they bought the ETF mgt from DBS Asset http://www.dbsam.com/Pages/default.aspx (he got it wrong - calling it Nikko Securities, they were related in the past).

Why I say that the information is irrelevant is that STI-ETF funds are funds that purchases the constituent stocks in STI and the assets (shares) are guarded by trustees (that'where British trustee laws are useful) - even if in the VERY, very unlikely case that the managers go BUST...the assets are under the trustees unless the trustees have been "sleeping". Anyway, another irrelevant point is that Nikko Asset Management is independent of Nikko Securities... http://en.nikkoam.com/about
http://mobile.bloomberg.com/news/2011-09-0...kko-asset-s-ipo

As for Omega Securities, do you know what happened then? Do you know John Soh and what he did then? Better keep my BIG mouth shut - it is totally different as compared to STI-ETF INDEX funds. PLEASE do not confuse fellow fourmers. Thank you.

This post has been edited by chabalang: Apr 11 2012, 06:31 PM

So u think it works perfectly when there are so called Trustees around

Other parts of the world in US or so where funds collapsed because there are no trustees around ?

BTW , Singapore is a major shareholder of a Euro bank lost 8B ? due to a broker ? The board cannot be trusted or what ?

Your discussions are like sticking to " Malaysia Constitution clauses" , no doubt these laws are just perfect on their owns, without looking at the real world outside.

---

Added on April 11, 2012, 8:13 pmBTW BRO Wong,

Just for yr info only, AIA " used to buy" bonds of Class A , normally carry about 4 to 5% returns in the markets, could be partly due to some guarantees or rather assurances given to BNM for launching of certain products.

IF you find other bonds marketed elsewhere where u can get about 8 to 10% , I doubt they are of the same classes.

Of course, if you are just happy with the returns and not the risks , then others from mutual funds are in fact the better ones.

For share share with u only.

This post has been edited by SKY 1809: Apr 11 2012, 08:15 PM

Let me make this clear - I am here in the thread to help people (since wife is asking me why I am wasting time in the forum) - to improve financial literacy as a form of community service - if I can help only one person a week, I will be happy (I could have volunteered in AKPK but my spoken Malay "sudah karat"). I have NOTHING to gain and nothing to sell/earn from my postings - I already have enough $$$ for a comfortable retirement.

Since it is a personal financial mgt thread - I am trying my best to stick to it (if not, moderators will ban me). Our "discussion" started with SKY 1809 posting "One of the biggest mistake made in this forum, is that often advisers here advise people to buy just enough term insurance." I am not sure whether you are an insurance agent or not (related to insurance sales) but I feel the statement is rather unfair ...whether one should "buy term and invest" or "life" - depends on a number of factors. Then it went on and you decide to "whack" Mr Tan calling him a "very shallow thinker" when he was the CEO of NTUC Income for 30 years and a fully-qualified actuary. After that, you sent another "curve ball" hitting STI-ETF index funds - implying that it is a RISKY product because one of the two STI-ETF funds was managed by Nikko Securities - then I explained to you why it is not risky as you think.

I am sticking my points to STI-ETF index funds (it was mentioned in Mr Tan's article and you bashed it) - this is relevant to personal financial management since index ETF is a form of investment.

1) "So u think it works perfectly when there are so called Trustees around". There is NO such thing as a perfect 100% working system/structure as long as there are human weaknesses such as greed which can result in fraud and etc. (I will not go into rhetoric). Systems and checks can be in place but frauds are always possible. I guess you are not an Actuary (neither am I) but you should know probability - there are risks in almost every products...so what are the risks with STI-ETF (similarly for FBM-KLCI ETF)?
(i) Market risks - index ETF will track the particular stock market index...so if the share market goes down, you lose money
(ii) Tracking error risks - ETF unable to replicate the market index perfectly due to certain distortions such as changes to index constituent stocks and weightings
(iii) Liquidity risks - unable to sell when you want to-resulting in a lower pricing. Unlikely for index ETF, since there will likely be market makers but the bid-sell spread may be slightly wider in times of high volatility.

Now to your part on Trustee...I guess you do not know how an ETF is structured (I have done some work on it overseas) ...please read: http://www.skrine.com/index.php?option=com...=181&Itemid=202
http://www.skrine.com/index.php?option=com...=182&Itemid=203

The trustees are the custodian of assets - they have to safeguard the interests of unit holders - that's what they are PAID for. No doubt, things can go wrong and money can disappear into the air like in the recent case with SJ Asset Management (SC is still looking for Tan Whai Onn - http://www.sc.com.my/main.asp?pageid=311&m...=&linkid=&type= ). For STI-ETF managed by Nikko Asset Mgt - the trustee is HSBC Institutional Trustee Services...are you implying HSBC will be sleeping on its job?

For fellow forumers: I am NOT selling STI-ETF (I cannot anyway, it is traded on the exchange) or index ETF, I want people to know that its "manager and trustee risk" is not high as implied by SKY 1809. The key risks of an index ETF is still Market risk: http://www.investopedia.com/terms/m/marketrisk.asp and not the "so-called manager and trustee" risk implied by SKY 1809.

For fellow forumers: please take note some ETFs are RISKY.. http://seekingalpha.com/article/226233-can-an-etf-collapse . In US and Europe, there are ETFs that can employ hedge funds' strategies - those can be High risk. In M'sia, the ETFs in Bursa are basically plain vanilla LONG strategy ones only but there will still be market and tracking error risks.

2) "Your discussions are like sticking to " Malaysia Constitution clauses" , no doubt these laws are just perfect on their owns, without looking at the real world outside." Frankly, it took me quite a while to understand you were implying. FYI, I am not a young "chiku" - "without looking at the real world outside" - that's funny. I have seen Pan-El, Supreme Corp to Repco, Aokam Perdana, Joseph Chong's group of companies (e.g. Westmont), Soh Chee Wen's Omega/etc to Megan Media, Transmile and many others in Second Board and Mesdaq (list will be so Long) unfolding in my years of investment JUST in Malaysia. I think I have seen enough for my current lifetime (even though there always be new ones). BTW, no laws are perfect - they are man-made...the laws will be always be circumvented by people who intend to cheat/defraud . But that does not mean one has to hide in a "fox-hole" and put money in FD (or buy life insurance?).

Fellow forumer: my apologies for such a long, windy reply...Moderator: please feel to delete if it is off-topic. I will not reply to SKY 1809 anymore in this thread. Thank you.

This post has been edited by chabalang: Feb 15 2013, 05:33 PM

Dear Brother Chabalang,

Most of my doubts on the so called Nikko/ETF have been properly answered by u and I am very happy with your answers :-

1) on Nikko Securities, it is just a small part of the BIGGER picture (I have friends who had worked in Nikko and I know the fiascos)

2) In S'pore, there are two of them: one by State Street (they are "BIG") and the other by Nikko Asset Management - they bought the ETF mgt from DBS Asset http://www.dbsam.com/Pages/default.aspx (he got it wrong - calling it Nikko Securities, they were related in the past).

3 ) For fellow forumers: please take note some ETFs are RISKY.. http://seekingalpha.com/article/226233-can-an-etf-collapse . In US and Europe, there are ETFs that can employ hedge funds' strategies - those can be High risk. In M'sia, the ETFs in Bursa are basically plain vanilla LONG strategy ones only but there will still be market and tracking error risks.

4) The trustees are the custodian of assets - they have to safeguard the interests of nit holders - that's what they are PAID for. No doubt, things can go wrong and money can disappear into the air like in the recent case with SJ Asset Management (SC is still looking for Tan Whai Onn - http://www.sc.com.my/main.asp?pageid=311&m...=&linkid=&type= ). For STI-ETF managed by Nikko Asset Mgt - the trustee is HSBC Institutional Trustee Services...are you implying HSBC will be sleeping on its job? I have ex-students working for institutional trustees in S'pore, Australia, H.K and etc. - I know workings of trustee services quite well.

5) "So u think it works perfectly when there are so called Trustees around[I]".

There is NO such thing as a perfect 100% working system/structure as long as there are human weaknesses such as greed which can result in fraud and etc. (I will not go into rhetoric). Systems and checks can be in place but frauds are always possible.

6) "Your discussions are like sticking to " Malaysia Constitution clauses" , no doubt these laws are just perfect on their owns, without looking at the real world outside."

Frankly, it took me quite a while to understand you were implying. FYI, I am not a young "chiku" - "without looking at the real world outside" - that's funny. I have seen Pan-El, Supreme Corp to Repco, Aokam Perdana, Joseph Chong's group of companies (e.g. Westmont), Soh Chee Wen's Omega/etc to Megan Media, Transmile and many others in Second Board and Mesdaq (list will be so Long) unfolding in my years of investment JUST in Malaysia. I worked in IBs and securities firms before moving to academic and now back to finance industry . Scandals, frauds, cheating cases and etc. - I think I have seen enough for my current lifetime (even though there always be new ones). BTW, no laws are perfect - they are man-made...the laws will be always be circumvented by people who intend to cheat/defraud . But that does not mean one has to hide in a "fox-hole" and put money in FD (or buy life insurance?).


Further to the above :-

One point I might disagree with u is that u find the comfort in putting money into Nikko Asset Management where there are published facts about the frauds conducted by their related/parent company in Japan, and despite the above statements ( of yours ) . I doubt I could sleep well if I put the money with them.

One thing I never claim that ETFs are no good.

Once again thanks for sharing your valuable knowledge with me .

p/S : "Salomon Smith Barney, the securities arm of Citigroup Inc., and Japan's No. 3 brokerage firm, Nikko Securities, said yesterday that their investment banking venture would open on Monday after a month's delay because of procedural problems. The venture, Nikko Salomon Smith Barney Ltd., will be capitalized at 106 billion yen, or $883 million, and will have a staff of about 1,100. Separately, Standard & Poor's lowered Nikko Securities' counterparty rating yesterday to "BBB-," one notch above "junk" status."

In the wake of the global financial crisis, Citigroup C +3.07% sold its stake in Nikko AM to Sumitomo Trust in a deal that valued the firm at ¥112.4 billion.

This post has been edited by SKY 1809: Apr 14 2012, 11:01 AM

20% cash, 20% in fixed deposit, 30% in share market and 30% in property.

sorry OT a bit i think ur siggy is oversize more than 15 lines approved ......

But i sure like the view... bad for investment / net worth building though - know the saying when blood rushes off to other body parts, the brains don't work well

Anyhow, instagirl.net, nice assets... er.. asset allocation - the Q is...
20% cash, 20% in fixed deposit, 30% in share market and 30% in property.
why 40% in cash/near cash form? no bonds/bond funds as a diversification and more returns than cash & FD?

Just a thought.

This post has been edited by wongmunkeong: Apr 13 2012, 11:34 PM

I like the small words i.e " asset allocations" though, since mentioned by u a couple of times.

In a way , this Asset Allocation Model never belittles assets producing smaller returns at times. They all have theirs functions put into the right respective places and time. The reasons why are there for you.

Like the famous saying _ Cash In KIng, of course not all the times, but should be seriously considered in times of great uncertainties. Treasury is another important class though the return is chicken feed type.

And Asset Allocations usually put risks on top of returns in term of top priority. And like our world , some forms of balances to preserve for a better living. The returns from farming of Rare Earth could be wonderful, but what about the social impacts to the human beings ?

Benefits could outweigh costs if you think human life are unimportant.

Wealth preservation is equally important, though might not be agreed by the shallow thinkers. So noises could be expected from time to time. " Self insured " does not go well along this philosophy. You allow wealth to be destroyed or putting wealth accumulated at great risk as soon it is built. So you simply take away the goal keeper in football , the moment you hit a goal.

And asking Singaporeans to accumulate only S$300K for retirements , and deemed to be enough and self insured in the far future could be grossly under estimated, or over simplified, at what lifestyle and with what medical cares factored in ?


In order to reach our goals as planned, investments needed to be fine tuned through asset allocations as we go along.

Best Regards

Just my own thoughts, and may not present the views or teachings of any financial planning body.

This post has been edited by SKY 1809: Apr 14 2012, 05:03 PM

Yup yup - it all depends on one's goals / mini goals, a huge % in cash may be great or it may not.
All in all, asset allocation (which can be dynamic, static, core-satellite), IMHO, is a way to get enough returns for the types & gravity of risks one is willing to take (optimum risk/reward based on individual's wants?)
VS
diversification within an asset class, for "protection" from being overweight on a certain sub-asset (cash, stocks, etc.) and hitting a wall when kaka happens.

Just a thought

This post has been edited by wongmunkeong: Apr 14 2012, 11:20 AM

Well, I like WB NO. 1 policy " Do Not lose your Capital "

That is Wealth Protection/ preservation to me.

One great man i.e WB does not boost about the magical returns of his portfolio, but putting Capital Preservation as the number 1 priority.

He could write many best sellers and boosting on " how to make the best returns from your money" , though.

But if you have lot of " low risk and high returns" experiences , plse kindly share with us.

I have enough of the theory parts.

This post has been edited by SKY 1809: Apr 14 2012, 11:44 AM

IMHO, "low risk" can be achieved even in "normal stocks" of good companies when i buy right at point of heightened fear - ie. ppl start cursing & swearing off stocks, old German multi-millionaires driving onto incoming trains,m etc.
eg.
a. Public Bank in 2009 1st quarter was about $7.50 to $8 (a 3 year or so low). Bought, sat on it, monitored every day end until mid 2011 and sold half. 72% net / 23.67%pa net

b. LPI in 2009 1st quarter was about $9, also a 3 year or so low). Similar to above, 125.35% net / 42.54%pa net
I was "lucky" as i've always been ready to buy these 2 (filtered for about 10 good companies on KLSE) and when kaka happened and market price = lelong, woo hoo.

-------------
It can also done similarly with REITs - based on market value (which is human sentiments + some financial basis) is way under the net assets per share + the REITs' business is still running as well as it has for several years and throwing out good gross dividends 8%pa to 11%pa.
eg.
a. Tower REIT, similar to the above, 56.48% net / 19.19%pa net
b. BSDREIT, bought 4 times throughout 2011, currently held 100%, with net profit ranging from
Net / pa net
34.38% / 33.98%
34.38% / 47.90%
34.37% / 53.27%
17.76% / 101.47%

Again "lucky" as i've been eyeing TWRREIT since a year or two after REITs started. As for BSDREIT - liked the DY% and just went in bit by bit and.. whoa.. lucky gua.

-------------
Bottom line, IMHO, buy good stuff during sales (lelong).
Just like ah sohs (oo i'm one now ) going nuts on that milk powder selling 25% below normal market price of the last 1 to 3 years heheh. I'm one of those that stocks up milk powder, vacuum packed brown rice, dry food, soaps, shampoos during a "good sale". Definitely will be used, can keep and now cheap, why not?
Similar thinking i use on good stocks, REITs & properties.
Simple as stone but it works for me & my loved ones (of course i don't sai lang put 100% of my net worth in lar).

What works for me (a simple lelong / value buy), may not work for all. Some needs more data/statistics/economics/etc.
Just a thought

PS: Side note - i do hold "cash" in my flexi mortgage (better than FD to me) & bond funds until i need it.
That's why in 2010, my actual held Asset Allocation grew lopsided (overweight) to Fixed Income until like it was 60% to 70% of my total assets, due to crazy pack rat approach to saving .
Started to force myself to buy into Equities (REITs and foreign focused mutual funds) in 2011, luckily (see BSDREIT above).

This post has been edited by wongmunkeong: Apr 14 2012, 12:00 PM

Thanks.

Those are the good ones. Congratulations.

At that moments ( you bought ) could be termed as high risks because of great uncertainties. Though , you are sure they would perform in the future. Some insurance protection for the family could be important until " self insured point" .

But if you did not preserve lot of cash in the first place for the right opportunities , how to buy

BTW, big cash value in insurance policy could be pawn for investments if you are very sure at that moment.

So it is back to asset allocation , right. i.e Cash Is King before the big sales.

This post has been edited by SKY 1809: Apr 14 2012, 12:19 PM

True, it the new stocks/equity funds + REITs (and eek SGX REITs) i bought in 2011 and now can be termed as "high" risk by some. To me, it's a calculated risk and i've just use a small portion % per se on them, again no "sai lang" / "show hand" craziness.

Personally, i believe in boring investments - like "ho hum.. ok.. looks good enough, put my allocated % in lor".
In addition, there are always uncertainties, even crossing the road or driving. That won't stop me IF i know i am able to drive safe well enough (ie. not drunk and no hot woman doing crazy things to me while i'm driving ) AND most also pick the time of day to drive (less cars best hehe). Yeah yeah, no 100% guaranteed like some BS from insurance/gold agents, but in life there's no 100% other than death.... and taxes can be "optimized"
Right or right?

Just a thought

This post has been edited by wongmunkeong: Apr 14 2012, 12:11 PM

Have u heard of Americans being shot down , not once but many times.

Though the % chance is very low.



This post has been edited by SKY 1809: Apr 14 2012, 02:18 PM

Heheh - got ar.
However, IMHO, to live life / invest / whatever, totally or heavily based on "black swans" or low probability kabloeys may not be too good an idea for the long run gua.

BTW, i've got a 2 buddies (1 guy + 1 gal) who does only fixed deposit. Both were going.. nah stocks/equities.. from 1998 all the way till now. They are the extreme other end i guess, compared to most of us middle-of-the-road investors.
Yeah, they may not have lost anything other than to inflation.
However, another POV, if their FD amount is significant, it doesn't matter if they only need lie 10% of the interest to live on during their retirement

No right, no wrong. I've not that "significant" amount thus FD will kill me in the long run hehe.
Thus, i need to be a hunter & farmer VS their farmer approach only.

Just a thought

This post has been edited by wongmunkeong: Apr 14 2012, 12:29 PM

But if WB puts all his money into FDs, no one would laugh at him. He just needs good wealth protection.

Ah.. but WB's cash holding is how many % of his net worth and invested/invest-able assets?

Oops - forgot to mention also, how much quantum of cash? See, at even 2%, the amount of cash it makes him.. he spends say only 10% to 30% of it and it can keep regenerating more than enough wor.

This post has been edited by wongmunkeong: Apr 14 2012, 12:40 PM

Could be Billions in cash . not sure about %

He did give away 30B cash in donations.

He WB did pawn his investments ( taking loans ) for more cash though to re invest like u though.

So he holds lot of spare cash hidden in the banks.

Some one just told me , and I never check the facts.

This post has been edited by SKY 1809: Apr 14 2012, 12:45 PM

Aiyo - bro, U ar... distract me with right hand but actually left hand holding same thing